MANILA, PHILIPPINES - ADB will substantially increase its support for regional cooperation in Central Asia over the next three years.

An updated strategy for its Central Asia Regional Economic Cooperation (CAREC) Program approved in November by ADB's Board of Directors proposes projects for the region totaling US$952 million.

CAREC will maintain its focus on transport, energy and trade in the 2006-2008 program, which includes 16 major projects totaling $943 million and 13 technical assistance projects totaling $9 million. These projects are mostly supported under ADB's country-specific lending programs. Additional funding is expected from ADB's concessional Asian Development Fund's regional allocation.

"ADB and our partners working under the CAREC umbrella will step up our efforts to mobilize the necessary resources and expertise to pick up the pace of regional economic cooperation in Central Asia," says Adrian Ruthenberg, Director for ADB's East and Central Asia Operations Coordination Division.

ADB President Haruhiko Kuroda announced on 6 November during a visit to Central Asia that multilateral institutions, including ADB, are planning to lend $1 billion to the region for transport projects alone over the next two years.

The CAREC Program is an alliance comprising eight countries - Afghanistan, Azerbaijan, People's Republic of China, Kazakhstan, Kyrgyz Republic, Mongolia, Tajikistan, and Uzbekistan - and six multilateral institutions: ADB, European Bank for Reconstruction and Development, International Monetary Fund, Islamic Development Bank, United Nations Development Programme and World Bank. CAREC aims to promote economic growth and raise living standards by encouraging regional economic cooperation.

Despite rapid economic growth across Central Asia in recent years, particularly due to strong global economic growth and increased energy exports, the region still faces serious poverty. While per capital incomes and employment have increased, income disparities have widened sharply.

"CAREC is focused on transport, energy, and trade as cooperation in these areas will lead to better progress in poverty reduction. The Program aims to transform the region from one that is landlocked to one that is landlinked so that regional trade, transport, and transit costs are not serious impediments to development, and participating countries can share vital resources, particularly energy and water, more efficiently," Mr. Ruthenberg adds.

The transport projects planned for 2006-2008 include the rehabilitation of regional railways in Uzbekistan, improvement of the southern corridor in Azerbaijan, development of a western regional road corridor in Mongolia, and rehabilitation of the Dushanbe-Kyrgyz border road.

Planned energy projects include improvement of regional gas transmission networks, rehabilitation of power supply in Tajikistan, rehabilitation of the Central Asia-Central Europe gas pipeline, and power interconnection projects.

As of end-June 2005, ADB had approved 11 loans totaling $275.1 million for seven CAREC-related projects and had attracted cofinancing amounting to $140.7 million for three projects. Between October 2000 and June 2005, ADB also approved 23 technical assistance projects totaling $17.44 million in grants.

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